The chief financial officer for rogue University of Miami booster Nevin Shapiro’s investment business has backed up his former boss’ claims that he threw parties on his yacht for UM football stars — plus sank $3.3 million of stolen investors’ money into a sports agency to recruit them for the NFL.
Roberto Torres, who was convicted along with Shapiro in his investment scam, gave a deposition last month that not only supports the former booster’s allegations to the NCAA. He also provides new financial details about Shapiro’s house-of-cards enterprise — including his questionable investment in Axcess Sports & Entertainment while he doled out money to players and the university.
“The boat was used for public relations and for entertainment of any of his friends or relatives or UM athletes, everyone,” Torres testified at a federal prison in New Jersey.
Asked by a Miami lawyer how he knew Shapiro used his 59-foot Rivera yacht to recruit Canes’ athletes, Torres said: “Because Shapiro told me, because I saw them on the boat, because I saw the pictures of all of them in the boat, because [Shapiro’s sports agency partner] Michael Huyghue mentioned that about the boat, because the captain spoke about the UM athletes. ... There were several.”
Torres’ testimony in the bankruptcy case of Nevin Shapiro’s defunct business, Capitol Investments USA, is likely to catch the attention of the NCAA, which plans to hold an infractions hearing next month alleging the university lacked institutional control over Shapiro and his dealings with UM athletes during the past decade.
Shapiro, 44, who is serving a 20-year prison sentence for securities fraud and money laundering in a $930 million Ponzi scheme, claims he plied UM players with cash and other impermissible gifts on his yacht and at his Miami Beach mansion —assertions that his former CFO, Torres, backs up. But Torres doesn’t name any Canes athletes who received them.
Torres, 79, who is serving a four-year prison sentence for securities fraud, also testified that he witnessed and overheard conversations in which Shapiro talked about his “liabilities if the athletes received benefits from Mr. Shapiro because Mr. Shapiro was a booster there.”
Torres’ deposition, taken by Miami lawyer Gary Freedman in Shapiro’s bankruptcy case, is unique for two reasons: He’s the first former employee of Shapiro’s Miami Beach-based investment business, which purported to broker wholesale groceries, to testify about the disgraced UM booster’s claims. Also, his testimony can be used by the NCAA, which is not insignificant.
Earlier this year, the NCAA embarrassed itself when the collegiate organization acknowledged that its lead investigator in the UM case had collaborated with Shapiro’s criminal defense attorney, Maria Elena Perez, to use the bankruptcy proceeding to take the 2011 depositions of Shapiro’s former Axcess partner, Huyghue, and ex-Canes assistant equipment manager, Sean Allen. The investigator, Ameen Najjar, at the behest of Shapiro, asked Perez to issue bankruptcy subpoenas for the two witnesses because the NCAA did not have that power to compel their testimony.
To preserve its two-year-old UM probe, the NCAA threw out their depositions. In response, the university, which has already given up two bowl games and one post-season ACC title game, sought to get the case dropped. But the NCAA would not budge.
Huyghue, a lawyer and former United Football League commissioner, testified that he sold a $1.5 million interest to Shapiro in Huyghue’s Axcess sports agency because he needed his money — not because of his access to UM athletes. Huyghue also testified that he teamed up with Shapiro because of the stature of the Miami law firm, Shook, Hardy & Bacon, that advised him on the investment in 2003. Huyghue said that the firm’s lawyers told him the UM booster had a net worth of more than $5 million.
Allen, a UM graduate, testified in his deposition that Shapiro gave cash to several UM players. Allen, who worked at Axcess for less than a year, also said under oath that he gave small amounts of his own money to Canes’ NFL prospects. He also testified that Shapiro gave him $3,000 to entertain a trio of Canes’ high school recruits at a local strip club.
Torres’ testimony during last month’s deposition indicated that Shapiro put far more money into Axcess: $3.3 million. He also said Shapiro stole at least $9 million from his investors to pay off debts from gambling on football and basketball games. He also said that Shapiro took another $7 million to put into a North Carolina golf course resort deal.
Torres repeatedly testified that Shapiro’s main lawyer, Marc Levinson, with whom he grew up on Miami Beach, and other attorneys at Shook, Hardy & Bacon, were fully aware that Shapiro took money from new investors to diversify into areas unrelated to his grocery brokerage business. Torres also said under oath Shapiro used some of the new funds to pay back old investors, and that Levinson and other lawyers at the firm knew about his scheme.
Torres testified he advised Shapiro that he was “dead against” his investing in Axcess because he “didn’t have the cash” — contradicting Huyghue’s understanding of the UM booster’s net worth.
Torres also said under oath that he advised Shook, Hardy & Bacon of Shapiro’s financial straits before the Axcess deal.
The bankruptcy trustee for Shapiro’s former company, Capitol Investments USA, has sued Levinson and the 500-lawyer firm in a bid to recover some of the $110 million lost by victims fleeced by the convicted businessman.
The firm’s lawyers provided advice to Shapiro from 2003 to 2009 on his investment in Axcess while he was a UM booster, as well as on his dealings with investors who lent him millions of dollars at high interest rates in the belief the funds were for his grocery brokerage business.
The suit, which names Levinson and Shook, Hardy & Bacon as defendants, accuses them of “aiding and abetting” Shapiro’s violations of federal securities laws during his investment scam, as well as his violations of NCAA regulations involving his alleged cash payments to UM star athletes.
Shook, Hardy & Bacon, which is based in Kansas City, Mo., with a major office in Miami, has said it was “disappointed” over the legal fight with the bankruptcy trustee.
“We will diligently defend ourselves in this case, and will continue our commitment to resolve any issues that arise in a reasonable, judicious and professional manner,” the firm’s statement said. It added: “Nevin Shapiro deceived many people, including those closest to him, and is serving a prison sentence for his reprehensible conduct.”